Alert: Adjustment – CAT

Ticker: CAT
Price: $218.42
Date: 4/28/23 11:30 pm
Underlying: Caterpillar

Master Portfolio Contracts: 10


We have emails that some of you were assigned on CAT last night or could not roll the short put and then were assigned.

This is an adjustment if you were assigned.

For those who were assigned, you may be able to scalp some profits off the long stock assignment today. At the time we are writing this update, CAT is up 4.59. Our recommendation would be to sell the stock.

For those that were able to make the adjustment yesterday, we are up $2500 this morning. That cuts into our debit significantly. There’s also the additional potential of profits. Not guaranteed, but with the adjustment we certainly have a better chance of making some money back.

If you were not assigned, stay in the position that we adjusted yesterday. That is a double calendar. It is now making money. We will manage it as a double core trade until conclusion.

For those that were assigned and want to stay in the trade, we would suggest selling a put against it. You can bring in a lot of cash by doing that and reducing the cost basis. Our suggestion this morning would be to sell the 12 May 235 put for a credit of around 16.50 mid-point. That alone will bring in almost $16,000 and significantly reduce the cost basis. Unfortunately, at this point, many of us are going to have different cost basis so you will have to track it yourself.

This should allow us to manage the position to at least a break-even or possibly even a profit. Looking at the algorithms, CAT has found a bottom and has fired buy signals. If we even get a few extra points out of it, we can probably reduce the debit to a much smaller number. If you have any questions, please contact us at [email protected] and put 5K in the subject box.

Trade Smart, Chris, Dave, and Jeff

Trade Detail:
Sell the stock shares
STO the 12 MAY 235 put for a credit of around 16.00 – 16.50.

Nothing to do.


Position After Trade Detail:

-10 CAT 12-MAY 235 put
+10 CAT 16-JUN 230 put
+10 CAT 16-JUN 210 put
-10 CAT 12-May 210 put